Microsoft’s Don Dodge on 50,000 Startups for $1B
Don Dodge at Microsoft has a well-balanced article responding to Thomas Friedman’s New York Times article, “Startup the Risk Takers.” The notion is that one place to put stimulus money is into startups, but not by giving it to venture (they really don’t want the money, he asserts, and is probably right in many cases). Rather, he suggests that funding incubators like TechStars, YCombinator (and I would add Plug&PlayTechCenter and Team UpStart) which jumpstart the first ten weeks of a new business opportunity, would provide the biggest bang for the smallest buck.
Stimulus Opportunities for Small Business
Who says that President Obama doesn’t get small business? Who says he isn’t giving business owners breaks on capital gains and other taxes?
Here’s what the recently-passed stimulus legislation provides:
Capital gains: Individuals who invest in small businesses over the next few years will get a nice break on their capital-gains taxes. If you buy stock in a small business, hold it for at least five years, and then sell it, current tax law allows you to exclude 50% of your gains (within certain limits). The stimulus bill increases that exclusion to 75% – but only for stock issued after the bill is enacted.
There are also equipment and hiring breaks and other key cost reductions.
Now if we can just get health care off the back of American business. Imagine being able to start a business and not have to worry about complicated benefits issues. When I see how relatively easy it is to handle tax and benefit issues in countries like Australia, I’m amazed that anyone starts a business in the US at all.
Read more at: http://4entrepreneur.net/?p=1387
Forget Innovation – Renovation is Better
This is not an article about how innovation is dead in the troubled times since 2008. On the contrary. I argue that widespread innovation may not have been in its ascendancy until the global economic meltdown.
In good times, really, innovation doesn’t happen. Improvement, yes. Invention, sure. Innovation, not so much. We use the word “innovation” for successful improvement projects, because it sounds better, but most change in good times is about improving (sometimes radically improving) how we do the things we already do.
Innovation, strictly speaking, is when we really change what we do in life and business. It is a shift in our core concept. We do not typically engage in this kind of change when we are doing well under the status quo. But when prosperity in the status quo collapses, people start to rethink not only how to do what they do today, but to embrace radical alternatives – new business models, job retraining, shifts to new industries. The buggy-whip maker, no longer able to prop up its dying line with easy financing, becomes a leather clothes maker.
There appears to be an inverse relationship between the level of talk about innovation and the level of real innovation. We talk a lot about innovation during boom times, when what we really see is strong improvement and invention, but very little true innovation. Now notice how quickly talk about innovation has dried up since September 2008. Yet, the level of real innovation since then has skyrocketed. People laid off from major companies are starting new companies of their own, using their severance package to get a start on the dream they have been keeping on ice for years. Companies facing bankruptcy are letting go of failing lines of business that relied upon excessive consumer spending and shifting to new offerings that appeal to more frugal customers. Lots of jobs are lost, but totally new jobs are starting to be created.
The real problem with innovation is that it has become a catch-all for anything that seems new that we want to praise. So I’m giving up the word. Let the improvers call themselves innovators.
There is a better word. Renovation. When you renovate, you have to blow out walls, rip out old plumbing, sometimes tear down the whole house. Then you take the usable old bits and bring in new materials, change the floor-plan, employ new ideas for what a house is supposed to be, and rebuild. If the economist Joseph Schumpeter was right, and innovation is the process of creative destruction, then in today’s lingo,renovation comes closer to the mark than our corrupt old favorite word, innovation.
In troubled times, it is time to start renovating.
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Invention is Killing Innovation
I just stood there in disbelief. A lab director was shutting down a promising cancer research project before my eyes, simply because someone had muddied the “intellectual property” landscape with dubious patents, patents the “inventor” never intended to use for any other purpose but to get licensing deals. How many people in the future might have been saved by a therapy that will now never be developed? I wonder.
The perpetrator here is not what you might think. The dubious patent filer in this case was not a so-called patent troll, just a normal operating company – one that makes real products…though no products remotely related to the patents they filed. (They have a practice of rewarding inventive employees who file lots of patents.)
Inventions are the nouns of innovation. But if you intend to do nothing with your invention but frame it and stick it on a wall, then you have an Invention without an Intention – a noun without a verb.
Just today I saw this tragedy again. A promising new company is at a stand-still as it wonders whether a patent filed years ago by someone who did nothing with it will result in their potential funders pulling the plug for fear of infringement or being slapped with exhorbitant licensing fees (or worse, legal fees fighting the dubious “inventor’s” claims).
A lawyer colleague tells me that she sees friends in her firm and others spending weekends just writing patents that come to their mind. Some of these people are making $100k a month extorting money from startups who “invented” a similar process or method entirely separately but who actually intend to use it.
This has to stop. This is not what Hamilton (no, it wasn’t Jefferson, who opposed all forms of monopoly, including patents) and the Framers had in mind when they wrote the patent and copyright clause into Article I of the US Constitution.
Fortunately there has been some progress. I nearly wept with joy when the Bilski decision was handed down by the US Federal Circuit Court, striking into the ditch many so-called business and method patent claims.
But until we require that an inventor show that he is putting his invention to practical use before issuing him a patent, we will continue to stifle innovation for the sake of invention.
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